Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip. In January 2025, the top-performing dividend payers included CVS Health CVS, International Business Machines IBM, and Bank OZK OZK.
To find the month’s 10 best-performing income-focused stocks, we screened the Morningstar Dividend Leaders Index, which tracks the performance of the 100 highest-yielding stocks from a broad basket of consistent dividend payers.
The Top-Performing US Dividend Leaders of January 2025
- CVS Health CVS
- International Business Machines IBM
- Bank OZK OZK
- FMC FMC
- CNH Industrial CNH
- Valley National Bank VLY
- Lincoln Financial Group LNC
- Synovus Financial SNV
- Truist TFC
- Stanley Black & Decker SWK
Best-Performing Dividend Stocks in the US
Source: Morningstar Direct.
How Have Dividend Stocks Performed?
Over the past month, the Morningstar Dividend Leaders Index, which captures the 100 highest-yielding names, rose 3.3%. The broad Morningstar Dividend Composite Index gained 3.3%. In the 12 months leading up to Jan. 31, the Dividend Leaders Index gained 20.5% and the Dividend Composite Index gained 18.7%.
1-Year Performance for US Dividend Stocks
Source: Morningstar Direct.
The overall US stock market, as measured by the Morningstar US Market Index, has gained 3.1% on the month and 26.3% on the year.
Yields and Metrics for January’s Best-Performing Dividend Stocks
CVS Health
Healthcare company CVS rose 27.3% in January and lost 20.5% over the past 12 months. Trading at $56.48 per share, its stock has a forward dividend yield of 4.71%. CVS pays investors an annual dividend of $2.66 per share. The stock, which has a narrow economic moat, is currently trading at a 39% discount to its fair value estimate of $93 per share, leaving it with a Morningstar Rating of 5 stars.
International Business Machines
Information technology services company IBM rose 16.3% in January and 42.9% over the past 12 months. At $255.70 per share, its stock has a forward dividend yield of 2.61% and an annual dividend of $6.68 per share. The stock, which has a narrow economic moat, is trading near its fair value estimate of $250 per share. It has a Morningstar Rating of 3 stars.
Bank OZK
Regional bank OZK gained 15.0% in January and 16.2% over the past 12 months. The stock’s $50.79 price gives it a forward dividend yield of 3.31%. OZK pays investors an annual dividend of $1.68 per share. The stock has a quantitative Morningstar Rating of 3 stars.
FMC
Agricultural inputs company FMC rose 14.8% in January and 3.4% over the past 12 months. Trading at $55.78 per share, FMC stock has a forward dividend yield of 4.16% and an annual dividend of $2.32 per share. The stock, which has a narrow economic moat, is significantly undervalued, trading 49% below its fair value estimate of $110 per share. It has a Morningstar Rating of 5 stars.
CNH Industrial
Heavy machinery company CNH gained 13.7% in January and 11.3% over the past 12 months. Trading at $12.88 per share, its forward dividend yield is 3.65%. CNH pays investors an annual dividend of $1.88 per share. The stock, which has a narrow economic moat, is trading near its fair value estimate of $14.70 per share. It has a Morningstar Rating of 3 stars.
Valley National Bank
Regional bank Valley National gained 13.5% in January and rose 11.4% over the past 12 months. At $10.28 per share, Valley National stock has a forward dividend yield of 4.28% and an annual dividend of $0.44 per share. It has a quantitative Morningstar Rating of 4 stars.
Lincoln Financial Group
Life insurance company Lincoln Financial rose 12.3% in January and gained 34.6% over the past 12 months. Trading at $35.16 per share, Lincoln Financial stock has a forward dividend yield of 5.12% and an annual dividend of $1.80 per share. It has a quantitative Morningstar Rating of 3 stars.
Synovus Financial
Regional bank Synovus rose 10.1% in January and gained 53.9% over the past 12 months. Trading at $56.42 per share, Synovus stock has a forward dividend yield of 2.69% and pays investors an annual dividend of $1.52 per share. The stock has a quantitative Morningstar Rating of 2 stars.
Truist
Regional bank Truist gained 9.8% in January and rose 34.1% over the past 12 months. The stock’s $47.62 price gives it a forward dividend yield of 4.37%. Truist pays investors an annual dividend of $2.08 per share. With a fair value estimate of $47 per share and a narrow economic moat, the stock is fairly valued and has a Morningstar Rating of 3 stars.
Stanley Black & Decker
Tools and accessories firm Black & Decker rose 9.7% in January and lost 2.1% over the past 12 months. At $88.07 per share, Black & Decker has a forward dividend yield of 3.72% and an annual dividend of $3.28 per share. It has a quantitative Morningstar Rating of 5 stars.
What Is the Morningstar Dividend Leaders Index?
The Morningstar Dividend Leaders Index captures the performance of the 100 highest-yielding stocks with consistent records of paying dividends and can sustain those payments.
It’s a subset of the Morningstar US Market Index (which represents 97% of equity market capitalization) that includes only securities whose dividends are qualified income. Real estate investment trusts are excluded. Companies are screened for dividend consistency and sustainability. Each must have a positive five-year dividend per share growth and a dividend coverage ratio greater than 1. The 100 highest-yielding stocks are included in the index, weighted by the dollar value of their dividends. See the full rulebook here.
The Best Dividend Stock Leaders: More Ideas to Consider
Investors who would like to find more top-performing or cheap dividend stocks can do the following:
- Review the full list of stocks in the Morningstar Dividend Leaders Index. Stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
- Use the Morningstar Investor Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures like price/earnings ratios, and more.
- Use Morningstar Investor to build a watchlist of the best dividend stocks and easily follow those stocks’ valuations, ratings, and dividend yields.
- Watch our dividend stock video series, hosted by David Harrell, for ideas to consider.
- When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages—known as economic moats—matter to a stock’s potential for outperformance.
- Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
Companies that are not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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